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Landowner inaction stalls Willamette Falls Riverwalk

Officials discuss next steps to allow project to proceed if an impasse continues.

Governments involved in the Willamette Falls Riverwalk project are weighing their next moves if the owner of the former Blue Heron mill site continues to stall on plans for the project.

They say Falls Legacy LLC, the partnership that took over ownership after Blue Heron Paper closed its mill in Oregon City in 2011, has failed to sign off on a master plan for a riverwalk allowing public access to the falls. The inaction stalls permit applications that are required before construction.

Falls Legacy LLC also failed to pay $200,000 by a January deadline for work leading to redevelopment of the area for business expansion.

Now the four governments involved — Metro, Oregon City, Clackamas County and the Oregon Parks and Recreation Department — have chosen to go public with their complaints.

"We have been in negotiations. They have raised issues; we have felt we have resolved them," Metro Councilor Carlotta Collette said Monday.

"We have moved back and forth. We finally decided that this is slowing us down. The public expects us to deliver on this project. At this stage we decided we need to have some kind of recognition from the owners they will sign the permit applications, as they are contracted to do."

A Metro spokeswoman said Tuesday there has been no response to a Sept. 22 letter signed by top officials from the four agencies.

Collette and others said at stake is $5 million the Oregon Legislature approved from lottery-backed bonds in 2013 as part of the $25 million amassed for the first phase of the project. About half of that $25 million comes from state sources.

The $5 million is in jeopardy if progress cannot be shown according to timelines, said M.G. Devereux, deputy director of state parks.

Metro is the lead agency for the four governments on the Riverwalk project, which has submitted permit applications to the U.S. Army Corps of Engineers. The governments will have to undertake an assessment, which will take about a year, of the historical and cultural resources of the site.

Falls Legacy LLC, a partnership of George Heidgerken and someone else, has an easement agreement with the governments for the site approved in 2014.

Brian Moore, the project manager, said the Riverwalk has undergone design changes in response to concerns raised by Falls Legacy LLC — and the governments have prepared a second agreement to resolve other issues.

"We're still waiting" for a signing by Falls Legacy, which Moore said has had the agreement since Aug. 3.

Moore said the governments do not want to be specific now about potential steps they may take if the impasse continues.

"We are hoping that raising the issue publicly will get them to work with us to help complete the project," Collette said. "But it is a real estate transaction, and there are other things we can do."

The master plan for the Riverwalk was unveiled earlier this year after a series of public meetings.

"We believe the Riverwalk is the key to unlocking economic development, as opposed to blocking economic development," Collette said. "Getting people to the site and getting people excited will make redevelopment happen."

John Southgate, an economic development consultant for Clackamas County, said, "Community support has been enthusiastic."

The mill's closure in 2011 resulted in the loss of 175 high-paying jobs.

Laura Terway, Oregon City's community development director, said the site was where the city began — the city was established at the east end of the falls in the 1840s — and the city sees the Riverwalk as vital to its future.

"Everybody who lives in the city knows somebody who has worked at the site," she said. "There is an overwhelming consensus for what the vision is."

Other land use approvals will have to come from Oregon City, but they will have to await further design work and permits from the Army Corps of Engineers.

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